How do you draft and review import/export contracts?

1 What are import/export contracts?

Import/export contracts are agreements between parties involved in the cross-border movement of goods. They specify the terms and conditions of the trade, such as the description, quantity, quality, price, delivery, payment, and dispute resolution of the goods. Import/export contracts can be written or oral, but written contracts are preferable as they provide more clarity and evidence in case of disputes.

2 Why are import/export contracts important?

Import/export contracts are important because they define the rights and obligations of each party, allocate the risks and costs of the trade, and comply with the relevant laws and regulations of the countries involved. Import/export contracts can also help you avoid misunderstandings, delays, losses, penalties, and litigation that can arise from international trade. Import/export contracts can also enhance your credibility and reputation as a reliable and professional trader.

3 What are Incoterms and how do they affect import/export contracts?

Incoterms are a set of internationally recognized rules that define the responsibilities and liabilities of buyers and sellers in international trade. They determine who arranges and pays for the transportation, insurance, customs clearance, and delivery of the goods. Incoterms are not mandatory, but they are widely used and accepted as a standard language in import/export contracts. Incoterms can simplify and harmonize the trade process and reduce the potential for disputes and conflicts.

4 How do you draft an import/export contract?

Drafting an import/export contract requires careful planning and research, starting with identifying your objectives and expectations from the trade deal and communicating them to your counterpart. You need to choose the most suitable Incoterm for your trade and include it in the contract, as well as describe the goods accurately and completely. Furthermore, you must determine the price and currency of the goods, the delivery date and time, warranties and guarantees, and who will be responsible for obtaining necessary licenses. Additionally, you must agree on applicable law and jurisdiction, review and revise the contract draft with your counterpart, sign and date it, and keep a copy for your records. It is recommended to seek legal advice if needed.

5 How do you review an import/export contract?

Reviewing an import/export contract is just as important as drafting one. When reviewing, you should check the accuracy and completeness of the parties, goods, price, payment, delivery, and Incoterm information. Additionally, you should ensure the language and terms used in the contract are consistent and clear, avoiding any ambiguity or contradiction. Furthermore, the contract should be compliant with laws and regulations of the countries involved and international trade rules and conventions. It is also important to evaluate the fairness and balance of each party's rights and obligations, as well as the risks and costs of the trade. Additionally, you should check for the feasibility and practicality of the contract, including contingency plans for unforeseen events. Lastly, you must verify that the contract is enforceable and valid, with a dispute resolution mechanism in place.

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?